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The trickiest, officials say, is the $950-million contract for delivery of four advanced Talwar class frigates for the Indian Navy that was inked in 2018. The warships are designed to operate with a Ukrainian power plant, with no alternative option available.

India had to pull through a diplomatic coup of sorts in 2019 when it managed to convince Ukraine to supply engines for the first two ships that are being made in Russia, despite the Crimea crisis. These Zorya Mashproekt RPC gas turbine engines have been delivered to the Kaliningrad shipyard and are being integrated on the warships.

Deals under threat
• Project 11356: $950-m deal to supply four frigates to the Indian Navy
• Two being built in Russia. Gas turbine engines are Ukranian
• S-400: Delivery of first regiment has taken place
• Prolonged crisis could impact future deliveries
• JV with Russia: Brahmos-Russian venture recently bagged export order from the Philippines JV for production of AK

Closure of Any Project Unlikely

However, two additional ships are to be made at the Goa Shipyard with Russian assistance and power plants for them are yet to be delivered. There are concerns that uncertainty of supplies from Ukraine could adversely impact the project.

India has also received the first regiment of the S-400 air defence system from Russia but the delivery of four more is still hanging in the balance. There are no indications yet of any delay from the Russian side on the deliveries but a prolonged crisis in Ukraine is being seen as a matter of concern. In addition, US sanctions on India for the purchase under its CAATSA (Countering America’s Adversaries Through Sanctions Act) regime is now a distinct possibility. Till now, India had avoided the sanctions that have been imposed on Turkey and China in the past.

The sanctions will not lead to the closure of any projects as India is determined to go ahead with its Russian partnership but they cause delays in payments and procedural difficulties that take time to resolve. India and Russia have managed to evolve a process of payments for military systems that bypasses all US influenced banking controls. A significant part of these payments are being made through the Rupee-Rouble route.

Other Indian projects that can come under the scanner are the two joint ventures with Russia to manufacture missiles and assault rifles. The Brahmos project is jointly owned by the two nations and has recently won an export order to the Philippines, with more on the horizon. The other joint venture to produce Kalashnikov AK 203 assault rifles in India is yet to fully take off as production has not yet commenced in Amethi, where the factory has to be set up.

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The memorandum of understanding was inked on the sidelines of Aero India show, on 10 February. GSL also inked four other agreements with various industry partners to expand its capacity for indigenous shipbuilding, ship repair and exports.

In 2019, GSL had also opened an office at Karwar, where the naval base INS Kadamba is situated.

GSL will also collaborate with Singapore-based firm SeaTech to explore engineering design work at GSL’s research and development centre. GSL is also exploring export of patrol craft and offshore patrol vessels to Bangladesh.

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South Africa’s Paramount and Namibia’s Windhoeker Maschinenfabrik (WMF) are currently engaged in armoured vehicle trials in India. Paramount Mbombe 4 armoured personnel carrier and Maverick internal security vehicle alongside a WMF Werewolf were been seen undergoing trials near Ladakh late in August.

The Mbombe 4 was badged as the Kalyani M4 – Kalyani Group is an Indian engineering, technology and manufacturing conglomerate that offers armoured vehicles, ammunition, defence electronics and artillery systems. One of its subsidiaries is Bharat Forge, which in February announced it was setting up a joint venture with Paramount Group to explore the indigenisation of defence systems in India, with a focus on protected vehicles and aerospace.

Bharat Forge and Paramount at the February DefExpo in India displayed the Kalyani M4/Mbombe 4 and Kalyani Maverick.

The vehicles, along with the Werewolf, are believed to be undergoing evaluation with the Indian-designed and built 8×8 Tata Kestrel (also known as the WhAP – Wheeled Armoured Platform) to meet an Indian Army requirement for a new armoured wheeled vehicle. The 25 ton WhAP has been seen undergoing various tests lately, including amphibious tests.

In November 2019, the Indian Army issued requests for information for the supply of 198 wheeled armoured fighting vehicles, with a request for proposals scheduled for mid-2020. Locally manufactured vehicles are preferred under the Buy Indian initiative.

The requests for information mentioned the amphibious 8×8 solution “should be provided with high mobility, adequate armour protection and [an] armament configuration suitable to destroy enemy tanks and undertake local protection”. This includes twin anti-tank missiles.

Navy Cancels Reliance Naval NOPV Contract

The Indian Navy has cancelled Reliance Naval and Engineering Ltd’s (RNEL) Rs 2,500-crore naval offshore patrol vessels (NPOVs) contract, owing to delay in delivery of the vessels.

The contract to build five warships was signed with the company in 2011, much before the Reliance Group took over the Gujarat-based shipyard from its erstwhile owner Nikhil Gandhi.

The Reliance Group took over Pipavav Defence And Offshore Engineering Ltd in 2015 and later renamed it as Reliance Naval and Engineering Ltd (RNEL).

The cancellation of the NOPV contract has cast a shadow over the bidding process of RNEL, which is currently going through the debt resolution process in the National Company Law Tribunal (NCLT).

IDBI, the lead banker of the consortium of lenders of RNEL, had taken the company to the NCLT Ahmedabad due to the default in loan repayment. RNEL had an outstanding debt of over Rs 11,000 crore.

In August, 12 companies had submitted expressions of interest (EOI) for RNEL. These included APM Terminals, United Shipbuilding Corporation (Russia), Hazel Mercantile Ltd, Chowgule Group, Interups (USA), Next Orbit Ventures, ARCIL, IARC, JM ARC, CFM ARC, Invent ARC and Phoenix ARC. These companies are required to submit their final bids by October 31.

Out of the 12 companies, three major players with experience in the business, APM Terminals, United Shipbuilding Corporation (Russia), and Chowgule Group opted out of the bid process of RNEL. Only nine asset reconstruction companies (ARCs) were left in the fray.

RNEL may meet the same fate as two other private shipyards – ABG Shipyard and Bharati Shipyard.

Both, ABG Shipyard, with a debt of over Rs 19,000 crore, and Bharati Shipyard, with a debt of over Rs 13,000 crore, are already under liquidation, and lenders are likely to get less than Rs 800 crore and Rs 600 crore, respectively.

Nelco, Telesat Team Up For LEO Satellites

Tata group company Nelco has entered into a pact with global satellite operator Telesat to bring LEO satellite network to India, according to a statement. Nelco and Telesat will collaborate on terrestrial facilities, commercial distribution and regulatory frameworks to offer Telesat LEO satellite connectivity in India, the statement said.

Telesat LEO, a next-generation satellite constellation, will help bridge the digital divide in remote and challenging locations, accelerate 5G expansion, and enable new levels of performance for enterprise, telecom, mobility and government broadband connectivity on land, air and sea.

The availability of Telesat LEO network in India has the potential to provide a slew of benefits in areas entailing 4G/5G backhaul, mobile hotspots, distance education, telemedicine, village connectivity, in addition to maritime and in-flight connectivity.

Globally, the satellite communications industry has been growing leaps and bounds owing to advancements in technology, light touch regulations and an increase in internet traffic demands.

LEO satellites are poised to revolutionise the industry, and with the prospective opening of the space sector in India, Nelco, through its strategic relationship with Telesat, plans to serve new market segments and requirements for high-bandwidth, low latency applications with Telesat LEO connectivity.

Cryogenic Engine Dhawan-1 Unveiled

Space rocket startup Skyroot Aerospace, on 25 September, unveiled its cryogenic engine Dhawan-1 on the occasion of 100th birth anniversary of Indian rocket scientist Satish Dhawan, the third Chairman of Indian Space Research Organisation (ISRO). The ISRO rocket launch centre at Sriharikota is named after him — the Satish Dhawan Space Centre (SDSC).

India’s first privately developed indigenous fully cryogenic rocket engine runs on liquid natural gas (LNG) as fuel and liquid oxygen as oxidizer. The cyrogenic engine is 100 per cent 3D printed.

The cryogenic engine will be powering its Vikram II rocket.

The company is also developing Vikram I rocket which is expected to make its first flight in 2021.

Performance Security Requirement Waived Off

As another measure to support industry, requirement of “Performance Security” for the “Development Contracts” by DRDO and ATVP has been waived as per the approval of defence minister Rajnath Singh. This will apply to development contracts only, as defined in para 12.5 of the DRDO Procurement Manual, PM 2016, as amended. However, Warranty Bond would continue to be obtained from successful development partner to cover the DRDO/ ATVP interest during the warranty period.

This provision will be applicable for all RFPs issued in respect of development contracts after the date of issue of this amendment that is 23 September 2020. All ongoing cases of development contracts in which Request for proposal (RFP)/ contract has already been issued may continue to be regulated as per the provisions contained in the issued RFP/ contract.

Offset Banking Regulations Revised With DAP 2020

According to a Ministry of Defence Office Memorandum, after the notification of Defence Acquisition Procedure (DAP) 2020 and coming into force with effect from 01 Oct 2020, Banking Offset Claims will regulated as follows:-

•             Banking offset claims for which transactions have been completed on or before 30 Sept 2020 will be processed provided they are applied within one year of completion of transactions and complying with other laid down conditions in DPP 2016. No offset banking claims can be made for transactions done on or after 01 Oct 2020.

•             Offset banking claims which are at different stages of examination will be processed as per the provisions of the governing DPP wherein offset banking was permitted.

•             Offset banking credits can be utilised as per applicable provisions contained in DPP 2008, DPP 2011, DPP 2013 and DPP 2016 (as the case be).

Goa Shipyard Begins Production of Stealth Frigates

Goa Shipyard Ltd has commenced production of the two guided missile frigates, which are being built in collaboration with Russia’s Yantar Shipyard for the Indian Navy. GSL expects to deliver the first ship to the Navy by 2026.

Though the frigates are based on a Russian design, they will have significant indigenous content, including an Indian-built radar, sonar systems and sensors, communication suites and anti-ship BrahMos missile systems.

Initiating the production process, vice chief of naval staff, Vice Adm G Ashok Kumar said that the frigates would help the Navy meet maritime challenges.

India and Russia entered into a government to government agreement for four stealth frigates, with two being built in Russia and two at Goa Shipyard. The stealth frigate project is the largest contract in GSL’s history and represents a quantum leap in the shipyard’s capabilities.

Once completed, the two frigates will be advanced variants of the Talwar-class stealth frigates that are already in service with the Indian Navy.

The project will provide a significant boost to the indigenous shipbuilding sector in Goa and across the nation creating employment opportunities. We are expanding our vendor base three-fold to over 1,000 entities to encourage MSME participation in the project.

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